Electricity costs remain sky high

Dec 16, 2008 Editorial

In the “Around the Caribbean” section of our edition of Monday, December 15, there was a news item that the Barbados power company was lowering the price of electricity to its customers from 11.5 US cents (23 B’ds) to just US 6 cents (12 B’ds) per kilowatt hour (kWh).

Most of our readers must be forgiven for ruefully shaking their heads and muttering, “Them that have, gets!” as they ruminated on that bit of information.

In our neck of the woods, after all, where electricity costs to the ordinary citizen are an astounding 26.8 US cents per kWh, our beloved GPL had announced last week that, even though global prices for oil had plummeted to less than half of what it was a few months ago, we would not be seeing any decrease here any time in the near future.

An official of the corporation, in an inspired bit of bureaucratic logic, explained that since the Government had been forced to subsidise the corporation earlier this year — even after cutting some programmes — the present windfall would be used to revive those programmes.

Over in Barbados, however, the power company acknowledged that the Government had also been subsidising the cost of electricity — as a matter of course — since last year, when the price of fuel had skyrocketed.

Their logic dictated that, even with the subsidy removed, the low cost of fuel still generated surpluses that justified passing on savings to the consumer. And this brings us to the nub of the travesty (and tragedy) of electricity costs in Guyana.

GPL’s cost of electricity, even in the best of times, has always been astronomical – averaging at least twice the worldwide average costs, according to the World Bank.

There are several factors contributing to this albatross on economic development in our country, apart from bankrupting the ordinary man and woman in the street.

GPL has always been top heavy in its staffing, which led to the Guyanese variant of the old joke: how many GPL staffers does it take to change a light bulb? Seven – six to turn the ladder and one to hold the bulb.
But the greatest inflators to electricity charges were what are termed “technical and commercial losses.”

These added up to an incredible forty-four percent of our charges in 2002. It is claimed that the figure is now 33 percent, but we certainly have also not seen that purported diminution reflected in our bills.

The “technical losses” are those caused by inefficiencies in GPL’s operations in generation and transmission. The “commercial losses” are due to theft, with the latter component being the major contributor.

Very simply, then, even if oil were to drop to US$10 a barrel, GPL would still probably be running at a loss – and charging the honest customers to subsidise the cheats and its own inefficiencies.

When GPL was privatised in 1999, there had been specific benchmarks that had to be met in specified areas, including reduction of “technical and commercial losses.”

In 2002, the Public Utilities Corporation (PUC), which was the authorised body established to regulate the electricity monopoly so that the interests of the public were served, ordered GPL to reimburse customers US$7 million for not having achieved in 2001the overall target of 29 per cent stipulated in the GPL licence.

What makes our predicament direr is that the PUC has been gradually sidelined from performing its oversight functions since the Government re-nationalised GPL in 2003. Now that Government is its owner, all the requirements of its monopoly licence are thrown overboard and whatever GPL does has to be accepted.

While we have been focusing on the lack of review powers afforded the PUC over rates, the greater damage to our pocketbooks has been inflicted by a GPL given free rein over its performance – or lack thereof.
Has GPL been hitting its targets? Are there targets any longer?

So while we sigh as we consider the good fortune of our Bajan brothers and sisters, let us pray in this Holy Season that we may at least be provided with electricity, even as our rates remain stuck in the stratosphere. It appears that only Divine intervention can bring them down at this time.

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Electricity costs remain sky high

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